Do you recognize this guy above? That’s right. He’s Captain Obvious! Captain Obvious is the guy who preaches to the choir; tells Noah about the flood…
Get it? Good. Let’s move on. Here’s the translation for today’s rant: “Noah” is a Top 10 investment bank, the “flood” in this case is McKinsey & Company, or – I suspect – any of the other global management consulting powerhouses. Today, I “learned” from both Financial Times and Business Insider the following (from the BI article, my emphasis added):
“How are bank executives to cut costs? McKinsey’s answer is technology…because technology seems to be part of the answer to every question these days.”
Now, just let the sweet wisdom of that pearl roll around in your gourd for a minute. If you’re anything like I was earlier, you are now having a reaction like the one below (annotation not mine). I know, right?! Mesmerizing stuff. Thank me later for sharing the epiphany.
Not SEEMS. IS! Technology IS a part of every solution these days, along with shifts in skills mix, more efficient processing, and much greater sensitivity to data management.
Seriously. WTF?! This quote – which I guarantee is backed by thousands of other power words – is just one fruity chunk from an example of research that is like an orchard of horse apples. What’s worse? It happens all the time. Somehow all this technical leverage and know-how swirling around us today – the result of immeasurable brilliance – has also rendered us collectively lobotomized. Some incumbent “brands” have become so offensively arrogant (by gorging themselves on their own “output”) that if they say something, it must be true. We are all-knowing and mysterious, hire us!
Now, I must confess that I haven’t seen the full report. And, I can also confess in fairness right now that – at least according to the Business Insider content – there are some splashes of real insight in here. For instance, isolating / contrasting “revenue per producer” and “operating costs per producer” is a really nice step in the right direction, but is lacking a ton of follow-through. (Insert plug here: This “follow-through” is a core focus of the work we are doing at Alphacution.) If not for Coalition’s headcount data that isolates front office headcount within investment banking divisions, this analysis would be totally devoid of any bite.
Hasn’t McKinsey already been advising banks for a long time? Aren’t they already complicit in some of these failings? This was my first thought. Bloomberg – via Alexandra Skaggs at FTAlphaville – underscores this sentiment: “The amount banks spend on consultants like McKinsey ‘has almost doubled since 2007 to $29 billion last year, according to research by ALM Intelligence.'”
Here’s another funny thing: Big incumbents like these banks can’t help themselves. They are so immersed in a trance-like state of analog thinking that they can’t help but continue to dance with a supply chain of advisors that are steeped in the same mentality. They simply aren’t nimble enough of culture or operations to engage much differently.
And, don’t let the glossy’s from Getty Images and the buzzwords containing every combination of “digital” and “transformation” known to Watson fool you. It happens all the time. Thick, heavy collateral wrapped in the latest glitter, entirely sanitized of navigational value or creativity. Big tech vendors are also guilty of putting a thin coat of paint on their own re-recycled compost. (Hey, HPE! Howzit going?) It’s only fair to distribute the rant properly.
You wanna know how banks can really save on costs?!! Get some new advisors…
One more thing, just in case I haven’t properly stuck the landing yet: I have a dear friend who now works at one of these 3-letter consulting powerhouses starting with B. Over pint(s) in London a year back, he strutted: “You know, we can afford to give our research away. You can’t compete with us.”
Clearly.
